Answer:
Depreciation Straight Line Expense= 230,000/5= $ 46,000
Explanation:
Depreciation Straight Line Method= Cost - Salvage Value/ Useful Life
Depreciation Straight Line Method= $270,000- $40,000/5
Depreciation Straight Line Method= 230,000/5= $ 46,000
As it is straight line depreciation each year the depreciation expense will be the same . It will not change and hence will be $ 46,000
Straight Line Rate= 100%/ useful Life= 100%/5 = 20%
Double Declining Method = 2 * Straight Line Rate
Double Declining Method = 2 * Straight Line Rate= 2*20%= 40%
Year Book Value Dep Rate Dep Expense Accu. Dep. Book Value
1 $ 270,000 40% $ 108,000 108,000 162,000
2 $ 162000 40% 64,800 172,800 97,200
3 97,200 40% 38,880 211,680 58,320
4 58,320 40% 23328 235,008 34,992
5 32,992 40% 13997 249,005 20,995.2
